Cracking the Code

The retail industry is going bonkers over quick response (QR) codes — those square, two-dimensional barcodes resembling puzzles and mazes that give customers instant interactive access to product information through their smartphones.

“If you can provide not only information but also more of an entertaining experience as you dial into that product information, then that will be more captivating to a consumer,” says Don Eames, vice president, general manager of retail stores for Merrimack, N.H.-based specialty lifestyle retailer Brookstone.

QR barcodes have been used in Japan, where smartphone adoption has been more robust than in the United States, since the early 2000s. But as U.S. smartphone usage has exploded over the past few years, so, too has recognition of QR codes.

In retail stores QR codes can be attached to price tags, but marketers and advertisers are finding more innovative ways to display them to attract attention to their brands, such as on billboards, business cards, invoices, flyers and T-shirts. QR codes are showing up on product pages in catalogs and brochures, and retailers are even placing them in storefront windows to lure after-hours passers-by.

Once customers are engaged by capturing the image with a smartphone camera, QR codes interact with shoppers through dedicated video, audio, images and text, offering readily available content such as product ratings, specifications, demos and expert advice, consumer reviews and how-to guides.

“QR codes are just another way for brands to connect to and engage with their target audiences,” says Mark Lopez, digital director at Two West, a Kansas City company that helps brands resonate with shoppers. “They [customers] are already interested in the product; it’s really how you extend that interest and how you engage the user with your brand in a new and different way.”

Closing the gap
Retail marketers see QR codes as a game-changing opportunity to tighten the loop between consumer branding and point of sale.

“Customers are using the Internet today to get information about products before they make the purchase,” Eames says. “If you can close that gap from sitting in your house and gathering information to doing it in the store, that’s good for everybody.”

Brookstone, which operates more than 300 retail stores in high-traffic regional shopping malls and airports in the United States and Puerto Rico, began a test of QR code usage in 30 of its New York City-area stores, including its high-profile Rockefeller Center location.

The test is going so well that Brookstone plans to roll out QR codes into all its stores during the third quarter of this year, Eames says.

Brookstone’s Rockefeller Center store promotes the test in the store’s windows via big-screen TVs that mimic the Apple iPhone, whose 2007 introduction is widely credited with spurring U.S. demand for smartphone devices. The big screens show consumers what they will see when they scan a code, Eames says.

Mobio Identity Systems, a Vancouver identity management company specializing in mobile commerce and mobile marketing applications, surveyed QR code usage and found that growth in global QR code scanning activity — 4,549 percent — has been astronomical since the first quarter of 2010.

In March, The Home Depot launched a national communications strategy utilizing QR codes in its nearly 2,300 stores, on signage and in direct mail releases. The Home Depot will have the capability to edit the codes dynamically as new content is available. In turn, QR scans will give the chain invaluable customer demographic and shopping tendency insight.

George Hoffman, president of ClikGenie, a Kernersville, N.C., firm that works with retail organizations on in-store QR code management and delivery, says major retailers and other companies are adopting QR codes as a central marketing tool for a good reason: convergence.

“QR codes are an easy pathway to get you to more information,” he says. “What really makes people want to use it is that the information they are led to can be easily accessed quickly today. They don’t want to wait two minutes to get a download of an image or video.”

Easy and quick information
While QR codes may seem to be a technology suited for the largest of retailers, Project 7, a cause-related consumer goods retailer based in Southlake, Texas, is showing otherwise. The company sells products such as bottled water, gum, mints and coffee to create sustainable revenue streams. A portion of the profits is donated to one of seven cause-related efforts, such as homelessness.

In April, in conjunction with an Earth Day ad campaign, Project 7 teamed with HMS Host newsstand and convenience store locations (largely at West Coast airports) to push its biodegradable water bottles, using QR codes on signage as a linchpin of the effort.

“We thought, ‘What can we do to add to the signage and quickly educate the consumer and possibly influence their purchasing decision,’” says Casey Cheshier, Project 7 account director. “We developed some signage with a little QR code at the bottom that basically says use your smartphone to scan the code. What that code does is take you to our mission statement video that quickly tells you what Project 7 is, how we give back and what our products are.”

While the sample size is small, Cheshier says results of the campaign have been favorable enough that the company will look for other opportunities to introduce its brand to consumers using QR codes. “It’s such a new and trendy way to market to a certain demographic,” she says. “The demographic audience for Project 7 tends to skew younger and to the more tech-savvy consumer, so it just makes sense to provide product information and awareness through a channel that resonates with that demographic.”

Eames believes QR codes are going to be a staple in retail marketing going forward, although different iterations of the technology are starting to appear in the marketplace, such as scanning a corporate logo to receive information

For retailers, he says, QR codes will add pressure to deliver products and services as promised, since potential customers will have immediate access to information from other consumers.

“When customers scan the QR code and go online and they can read reviews on it, the last thing you need is having someone say the product quality was terrible or the delivery experience was terrible or the after-sale experience was terrible,” Eames says. “It puts pressure on the retailer to do better.

“It is kind of an extension of social media,” he says. “They get on and find out information and find out what the stores are giving them. I think that’s the way business will be conducted in the future.”